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Mr. Sanjay Lalbhai
Managing Director M/s Arvind Mills Ltd
How does India 'fit the bill' in the post - quota free regime?
"Post 2005, the global textile industry is poised for significant shift in trade patterns. Asia will emerge as the key textile outsourcing base due to strong cost and raw material advantage. Within Asia, China & India will be the biggest beneficiaries and would become the clothiers to the world. Post ATC, growth is expected to surge in the apparel segment. This provides immense opportunities for companies and countries that are vertically integrated. Since India & China have a large vertical set-up, global sourcing of apparels will shift to Asian & African region. The abolishment of quotas from January1, 2005 under WTO has opened a new era for Indian textile industry. It ended 40 years of protectionism by developed countries. Approximately, 47% of the restricted markets, or 35% of the world textile and apparel market will be opened up for free trade. Considering India is the 3rd largest cotton producer in the world (after china & US) and steps being taken to improve the yields and competitive manufacturing cost, Indian textile companies will be able to grab a larger share of the textile trade post WTO."
The global textile industry is in a fluid state, what is your reading of the prevailing situation?
In the early phase of quota removal, global trade needs to live with competition through pressure on prices and protection in other forms like high tariff barrier, anti-dumping safeguards and bilateral agreements. The situation will tide over as the consumer pressure increases as is evident from EU textile trade row with China.
Do you share the official vision of India achieving 7-8 percent textile and apparel exports in the coming three years, and about 15 to 16 percent by the year 2010?
"India has several advantages over other countries namely large fiber base and low cost labor and presence across the textile value chain. The opportunity for Indian textile growth arises from direct demand growth from quota-restrained markets and indirect demand growth for textile from other Asian countries.As per independent studies (KSA Techno study), the global trade is expected to rise to USD 650 billion by 2010. At the same time, India's share will double from 3.6% to 7.6% by 2010.Apart from the opportunity in world textile trade, domestic trade at USD 16 billion also presents a good opportunity due to growing consumerism. The optimism is due to Growing population with higher disposable income Favorable demographic profile - More than 70% of our population is below the age of 35 Emergence of organised retail - 314 Malls coming in India with 3 M sq ft of retail space being added in next two years Undoubtedly, it is retail boom in India. The domestic textile and apparel demand is likely to grow at a healthy CAGR of 8-9% between 2005 & 2010."
Published on: 12/09/2005
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.